WHAT IS A BALANCE SHEET?

A Balance Sheet is a snapshot of the financial position of an entity.

This snapshot is at a point of time.

Say, as at 7 May 2006, you look at Company A’s balance sheet, it reflects the financial position as at that day. After that day, the financial position company A can change to a better or worse situation.

Also, remember that in the Balance Sheet, we have the three (3) key components:

ASSETS= Liabilities + Owners’ Equity

( Refer to my illustration for the Dual Aspect Concept)

DEFINE WHAT ARE THE CHARACTERISTIC OF ASSETS?

resource controlled by the entity as a result of past events

and

       from which future economic benefits are expected to flow to the entity

WHAT ARE THE MAJOR COMPONENTS OF THE TOTAL ASSETS?

Comprises:

1. Current Assets

2. Property, plant and equipment

3. Investments

4. Intangible Assets